Replies to post #64 on The "Stock Trading Riches" Investment Sy

[PraveenP]

My final list for purchase had come down to RPM or NETC.

RPM International (RPM) is another stock you may want to look at as a value and dividend play. They are based in Medina, OH and make industrial and consumer paints, coatings, adhesives, solvents, etc. At $20, it is trading at 12 times Ken Fisher's estimate of 2011 earnings, 75% of its sales, and has 4% dividend yield.

I like this stock, but could only buy one this month, so I decided to go with NETC because it provides a little more diversification to my portfolio.

I don't have that much exposure to Brazil, but I have several stocks like RPM - including Cummins, Inc. (CMI) and Illinois Tool Works (ITW).

[aim hier]

Hi Praveen,

I was interested in your purchase of Brazilian Net. It doesn't meet my usual criteria, and Yahoo Finance doesn't confirm the ratios provided by Forbes. However, something you may not have known, is the world's richest man, Mexico's Carlos Slim, is close to acquiring control of the company. While the upside doesn't look good to me, the downside would appear very limited. I don't know how shareholder friendly, Slim is, but this could well turn out to be a very good long term investment.

In your book, I felt you seem to imply that $2,000 per stock was the most you could lose (assuming that you chose a constant value of $2,000). But, of course, the maximum loss is much higher. IN your book, you give an example of Amazon, it had a maximum investment in excess of $3,700. Had it joined other cyber retailers in zeroland, one would have lost $3,700+. Consider a stock that one bought at an intial price of $10, a year later it was $2.50, and a year later $0.63. IN this case, almost $5,000 would have been invested if one stuck to your system. You mention the possibility of using a stop loss, but you, yourself, don't use one. Have you never had a stock that became a 'deep diver'? If so, did you continue to hold, or did you take a loss, and move on?